UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 96-1006
RALPH M. NOWAK, ADMINISTRATOR OF THE
ESTATE OF SALLY ANN NOWAK, ET AL.,
Plaintiffs - Appellees,
v.
TAK HOW INVESTMENTS, LTD.,
d/b/a HOLIDAY INN CROWNE PLAZA HARBOUR VIEW,
Defendant - Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge ]
____________________
Before
Stahl, Circuit Judge ,
Coffin, Senior Circuit Judge ,
and Cummings, [*]
Circuit Judge .
_____________________
Alan B. Rubenstein , with whom Robert B. Foster and Rackemann,
Sawyer & Brewster were on brief for appellant.
Edward Fegreus for appellees.
____________________
August 22, 1996
____________________
CUMMINGS, Circuit Judge . [1]
A Massachusetts resident who accompanied her husband on a business trip
to Hong Kong drowned in their hotel's swimming pool. Plaintiffs later
brought this wrongful death diversity action against the Hong Kong corporation
that owns the hotel -- a corporation that has no place of business outside
of Hong Kong. Defendant moved for dismissal, arguing that a Massachusetts
court could not exercise personal jurisdiction consistently with due
process and, alternatively, that the case should be dismissed on the
grounds of forum non conveniens . The district court denied both
motions, and we now affirm.
I.
Tak How is a Hong Kong corporation with its only place of business in
Hong Kong. Its sole asset is the Holiday Inn Crowne Plaza Harbour View
in Hong Kong ("Holiday Inn"), where the accident in this case
took place. Tak How has no assets, shareholders, or employees in Massachusetts.
Sally Ann Nowak ("Mrs. Nowak") was at all relevant times married
to plaintiff Ralph Nowak ("Mr. Nowak") and was the mother of
their two children (collectively, the plaintiffs are "the Nowaks").
The Nowaks lived in Marblehead, Massachusetts, and Mr. Nowak was employed
by Kiddie Products, Inc., which has its place of business in Avon, Massachusetts.
Kiddie Products does extensive business in Hong Kong. As a Preliminary
Design Manager in the Marketing Department, Mr. Nowak customarily made
two business trips to Hong Kong each year, accompanied by his wife on
one of those trips.
Kiddie Products employees had made trips to Hong Kong since at least
1982, but the company's relationship with Tak How and the Holiday Inn
began only in 1992. John Colantuone, a vice-president, was one such employee
who had travelled to Hong Kong since 1982 and had stayed at various other
hotels. Colantuone was acquainted with the Holiday Inn through advertisements
on Hong Kong radio in 1983 or 1984, but only decided to stay there in
1992 after becoming dissatisfied with the rates at other hotels. On his
first visit, Colantuone met with the Holiday Inn's sales manager to negotiate
a corporate discount for Kiddie Products employees. Holiday Inn agreed
to the discount and wrote a letter confirming the arrangement based on
a minimum number of room nights per year. Marie Burke, Colantuone's administrative
assistant, made all hotel reservations for the company's employees. Although
Kiddie Products regularly compared rates at other hotels, Burke was told
to book all reservations at the Holiday Inn until instructed otherwise.
Since 1992, Kiddie Products employees have stayed exclusively at the
Holiday Inn.
In June 1993, the Holiday Inn telecopied Colantuone a message announcing
new corporate rates and other promotional materials. Burke requested
additional information, and the hotel promptly responded. In July 1993,
after a series of exchanges by telecopier, Burke sent a reservation request
to the Holiday Inn for several employees for September and October 1993.
One of the reservations was for Mr. and Mrs. Nowak to arrive on September
16. On September 18, while the Nowaks were registered guests at the hotel,
Mrs. Nowak drowned in the hotel swimming pool. The specific facts surrounding
her death are not relevant here. It is uncontested that in 1992 and 1993,
prior to Mrs. Nowak's death, Tak How advertised the Holiday Inn in certain
national and international publications, some of which circulated in
Massachusetts. In addition, in February 1993, Tak How sent direct mail
solicitations to approximately 15,000 of its previous guests, including
previous guests residing in Massachusetts.
The Nowaks filed this wrongful death action in Massachusetts state court
in June 1994. Tak How then removed the case to federal district court
and filed two motions to dismiss -- one for lack of personal jurisdiction
under Fed. R. Civ. P. 12(b)(2) and the other for forum non conveniens .
The district court initially denied the motion to dismiss for forum
non conveniens , and then, after allowing time for jurisdictional
discovery, issued a memorandum and order denying the Rule 12(b)(2) motion. Nowak v. Tak
How Inv. Ltd. , 899 F. Supp. 25 (D. Mass. 1995). The district court
granted Tak How's motion for certification of the jurisdictional issue,
but this Court denied Tak How's request for a stay of the district court
proceeding pending appeal. Nonetheless, believing that a resulting judgment
would not be enforceable in Hong Kong, Tak How did not answer the Nowaks'
complaint. Accordingly, the district court entered a default judgment
against Tak How for $3,128,168.33. Tak How appeals the denial of its
Rule 12(b)(2) motion and its motion to dismiss the case for forum
non conveniens .
II.
We first review the denial of Tak How's motion to dismiss for lack of
personal jurisdiction. The district court employed a prima facie standard
in making its determination rather than adjudicating the jurisdictional
facts. See Foster-Miller, Inc. v. Babcock & Wilcox Can. ,
46 F.3d 138, 145-147 (1st Cir. 1995). Both the court's decision to use
the prima facie standard and its conclusion under that standard are reviewed de
novo . Id. at 147. To begin, we find no error in the district
court's choice of the prima facie standard. A full-blown evidentiary
hearing was not necessary in this case because the facts were, in all
essential respects, undisputed. In such circumstances, the prima facie
standard is both appropriate and preferred. Id. at 145; Boit v. Gar-Tec
Prods., Inc. , 967 F.2d 671, 675-676 (1st Cir. 1992).
The next question is whether the district court reached the proper result.
In diversity cases such as this, the district court's personal jurisdiction
over a nonresident defendant is governed by the forum state's long-arm
statute. Sawtelle v. Farrell , 70 F.3d 1381, 1387 (1st
Cir. 1995). Under the Massachusetts statute,
[a] court may exercise personal jurisdiction over a person, who acts
directly or by an agent, as to a cause of action in law or equity arising
from the person's . . . transacting any business in this Commonwealth.
Mass. Gen. Laws Ann. ch. 223A, § 3(a) (1985). The statute imposes
constraints on personal jurisdiction that go beyond those imposed by
the Constitution. Gray v. O'Brien , 777 F.2d 864, 866
(1st Cir. 1985). We must therefore find sufficient contacts between the
defendant and the forum state to satisfy both the Massachusetts long-arm
statute and the Constitution. Sawtelle , 70 F.3d at 1387.
To satisfy the requirements of the long-arm statute, Section 3(a), the
defendant must have transacted business in Massachusetts and the plaintiffs'
claim must have arisen from the transaction of business by the defendant. Tatro v. Manor
Care, Inc. , 625 N.E.2d 549, 551 (Mass. 1994). In Tatro ,
a Massachusetts plaintiff sued a California hotel for injuries sustained
in California. The Court concluded that the hotel's solicitation of business
from Massachusetts residents satisfied the "transacting any business" requirement
of Section 3(a), id. at 551-552, and that the "arising from" requirement
was satisfied where, but for the hotel's solicitations and acceptance
of reservations, the plaintiff would not have been injured in California. Id. at
554. The factual scenario in the present case is analogous in all essential
respects, and we therefore have little difficulty concluding that sufficient
contacts exist to satisfy Section 3(a)'s requirements.
Turning to the constitutional restraints, this Court follows a tripartite
analysis for determining the existence of specific personal jurisdiction
(plaintiffs do not allege general personal jurisdiction):
First, the claim underlying the litigation must directly arise out of,
or relate to, the defendant's forum-state activities. Second, the defendant's
forum-state contacts must represent a purposeful availment of the privilege
of conducting activities in the forum state, thereby invoking the benefits
and protections of that state's laws and making the defendant's involuntary
presence before the state's court foreseeable. Third, the exercise of
jurisdiction must, in light of the Gestalt factors, be reasonable.
Pritzker v. Yari , 42 F.3d 53, 60-61 (1st Cir. 1994) (quoting United
Elec. Workers v. 163 Pleasant St. Corp. , 960 F.2d 1080,
1089 (1st Cir. 1992)), cert. denied , 115 S. Ct. 1959.
A. Relatedness
What this Court calls the "relatedness" test is one aspect
of demonstrating minimum contacts pursuant to International Shoe Co. v. Washington ,
326 U.S. 310. The other aspect, discussed below, focuses on the deliberateness
of the defendant's contacts, or purposeful availment. Tak How's principal
argument on appeal is that relatedness requires a proximate cause relationship
between its contacts with Massachusetts and the Nowaks' cause of action.
In arguing for a proximate cause relatedness test, Tak How relies on
a series of First Circuit cases beginning with Marino v. Hyatt
Corp. , 793 F.2d 427 (1st Cir. 1986). See Crocker v. Hilton
Int'l Barbados, Ltd. , 976 F.2d 797 (1st Cir. 1992); Fournier v. Best
Western Treasure Island Resort , 962 F.2d 126 (1st Cir. 1992); Pizarro v. Hoteles
Concorde Int'l, C.A. , 907 F.2d 1256 (1st Cir. 1990). In each of
these cases, this Court construed the language of a state long-arm statute
requiring, as does the Massachusetts statute quoted above, that the cause
of action "arise" from the forum-state contacts. Construing
those statutes, we rejected plaintiffs' arguments that the injury at
issue would not have occurred "but for" the forum-state contacts.
Instead, we held that the defendant's conduct must be the legal or proximate
cause of the injury. Pizarro , 907 F.2d at 1260.
At least for purposes of construing the Massachusetts long-arm statute,
the Supreme Judicial Court of Massachusetts dealt our restrictive interpretation
a fatal blow in Tatro , supra . The Court decided that
the "but for" test is more consistent with the language of
the long-arm statute and explicitly rejected our interpretation of the
statute in the Marino line of cases. 625 N.E.2d at 553. Personal
jurisdiction was proper in Tatro because the California hotel
had solicited business in Massachusetts and had agreed to provide the
plaintiff with accommodations; but for those acts, the plaintiff would
not have been injured. Id. at 554.
Tak How contends that Tatro was not fatal to Marino and
its progeny. It concedes, as it must, that Tatro is controlling
insofar as it deals with the construction of the Massachusetts long-arm
statute, but insists that the relatedness discussion in Marino had
constitutional significance as well. Its position is not without support.
In Pleasant Street , we stated that the Massachusetts statute's
relatedness requirement "mirrors a key constitutional requirement
for the exercise of specific jurisdiction." 960 F.2d at 1087. Then,
in explaining constitutional relatedness, we set forth proximate cause
principles derived from the Marino line of cases. See id. at
1089.
The Nowaks, on the other hand, argue that these cases have no constitutional
significance. They find support from a footnote in Ticketmaster-New
York, Inc. v. Alioto , 26 F.3d 201, 207 n.8 (1st Cir. 1994):
In our view, [the Marino line of cases] -- which interpret the
term "arising from" as that term is used in the long-arm statutes
of Massachusetts -- deal with state-law issues and have no real implication
for the relatedness requirement specifically or for constitutional analysis
generally.
(citations omitted).
Despite the apparent conflict, these cases are arguably reconcilable.
After all, Ticketmaster did not directly reject Pleasant Street or
the proximate cause test, but merely stated the evident fact that the Marino line
of cases centered on interpretations of state law. It might follow, then,
that our discussion in Pleasant Street should govern our course
here. Pleasant Street , however, as well as Ticketmaster ,
described the relatedness concept in only the most general way. Neither
case specifically defined the precise inquiry under the relatedness test
in this circuit. Fortunately, however, these cases, and others, articulated
certain principles that guide our inquiry.
As an initial matter, "[w]e know . . . that the [relatedness] requirement
focuses on the nexus between the defendant's contacts and the plaintiff's
cause of action." Ticketmaster , 26 F.3d at 206. The requirement
serves two purposes.
First, relatedness is the divining rod that separates specific jurisdiction
cases from general jurisdiction cases. Second, it ensures that the element
of causation remains in the forefront of the due process investigation.
Id. Most courts share this emphasis on causation, but differ
over the proper causative threshold. Generally, courts have gravitated
toward one of two familiar tort concepts -- "but for" or "proximate
cause."
The Ninth Circuit is the most forceful defender of the "but for" test.
In Shute v. Carnival Cruise Lines , [2]
the court stated that "but for" serves the basic function of
relatedness by "preserv[ing] the essential distinction between general
and specific jurisdiction." 897 F.2d 377, 385 (9th Cir. 1990). A
more stringent standard, the court asserted, "would represent an
unwarranted departure from the core concepts of 'fair play and substantial
justice,'" because it would preclude jurisdiction in cases where
it would be reasonable. Id. at 386. In turn, in those cases where "but
for" might lead to an unreasonable result, the court predicted that
the third prong -- the reasonableness inquiry -- would guard against
unfairness.
Shute and its progeny represent the only explicit adoption of
the "but for" test. Nonetheless, cases from other circuits
suggest a similar approach. In Prejean v. Sonatrach, Inc. ,
the Fifth Circuit noted:
Logically, there is no reason why a tort cannot grow out of a contractual
contact. In a case like this, a contractual contact is a "but for" causative
factor for the tort since it brought the parties within tortious "striking
distance" of one another. While the relationship between a tort
suit and a contractual contact is certainly more tenuous than when a
tort suit arises from a tort contact, that only goes to whether the contact
is by itself sufficient for due process, not whether the suit arises
from the contact.
652 F.2d 1260, 1270 n.21 (5th Cir. 1981). Subsequent cases, however,
have not always followed this teaching. See Luna v. Compañía
Panameña de Aviación, S.A. , 851 F. Supp. 826, 832
(S.D. Tex. 1994) (employing a proximate cause standard); Kervin v. Red
River Ski Area, Inc. , 711 F. Supp. 1383, 1389-1390 & n.11 (E.D.
Tex. 1989) (same).
The Sixth Circuit applies a "substantial connection" standard.
See Third Nat'l Bank v. WEDGE Group Inc. , 882 F.2d 1087,
1091 (6th Cir. 1989), cert. denied , 493 U.S. 1058; Southern
Mach. Co. v. Mohasco Indus., Inc. 401 F.2d 374, 384 n.27
(6th Cir. 1968). The court's discussion in Lanier v. American
Board of Endodontics , 843 F.2d 901, 908-911 (6th Cir. 1988), however,
suggests that a "but for" relationship survives the due process
inquiry.
Finally, the Seventh Circuit has upheld jurisdiction under the Illinois
long-arm statute, and the Due Process Clause, for claims that "lie
in the wake of the commercial activities by which the defendant submitted
to the jurisdiction of the Illinois courts." See Deluxe Ice Cream
Co. v. R.C.H. Tool Corp. , 726 F.2d 1209, 1215-1216 (7th
Cir. 1984) (breach of warranty); In re Oil Spill by Amoco Cadiz ,
699 F.2d 909, 915-916 (7th Cir. 1983) (indemnity action), cert. denied ,
464 U.S. 864. Whether this indeterminate standard would encompass tortious
negligence committed outside the forum is unknown. Cf. Simpson v. Quality
Oil Co. , 723 F. Supp. 382, 388 & n.4 (S.D. Ind. 1989) (suggesting
that relatedness is limited to those contacts substantively related to
the cause of action).
On the other hand, the Second and Eighth Circuits, as well as this one,
appear to approve a proximate cause standard. See Pleasant Street ,
960 F.2d at 1089; Pearrow v. National Life & Accident
Ins. Co. , 703 F.2d 1067, 1069 (8th Cir. 1983); Gelfand v. Tanner
Motor Tours, Ltd. , 339 F.2d 317, 321-322 (2d Cir. 1964). The courts
in Pearrow and Gelfland found that, for purposes of the
long-arm statute at issue, non-forum negligence claims did not arise
from in-forum solicitation or ticket sales. District courts from the
Third and Tenth circuits have reached similar results. See Wims v. Beach
Terrace Motor Inn, Inc. , 759 F. Supp. 264, 267-268 (E.D. Pa. 1991); Dirks v. Carnival
Cruise Lines , 642 F. Supp. 971, 975 (D. Kan. 1986).
This circuit, whether accurately or not, has been recognized as the main
proponent of the proximate cause standard. We think the attraction of
proximate cause is two-fold. First, proximate or legal cause clearly
distinguishes between foreseeable and unforeseeable risks of harm. See Peckham v. Continental
Casualty Ins. Co. , 895 F.2d 830, 836 (1st Cir. 1990). Foreseeability
is a critical component in the due process inquiry, particularly in evaluating
purposeful availment, and we think it also informs the relatedness prong.
See Pleasant Street , 960 F.2d at 1089. As the Supreme Court said
in Burger King Corp. v. Rudzewicz ,
[the Due process Clause] requir[es] that individuals have "fair
warning that a particular activity may subject [them] to the jurisdiction
of a foreign sovereign . . . ." [T]his "fair
warning" requirement is satisfied if the defendant has "purposefully
directed" his activities at residents of the forum, and the litigation
results from alleged injuries that "arise out of or relate to" those
activities.
471 U.S. 462, 472. Adherence to a proximate cause standard is likely
to enable defendants better to anticipate which conduct might subject
them to a state's jurisdiction than a more tenuous link in the chain
of causation. Certainly, jurisdiction that is premised on a contact that
is a legal cause of the injury underlying the controversy -- i.e. ,
that "form[s] an 'important, or [at least] material, element of
proof' in the plaintiff's case," Pleasant Street , 960 F.2d
at 1089 (citation omitted) -- is presumably reasonable, assuming, of
course, purposeful availment.
As our discussion suggests, and notwithstanding any contrary implication
from the footnote in Ticketmaster , we think the proximate cause
standard better comports with the relatedness inquiry because it so easily
correlates to foreseeability, a significant component of the jurisdictional
inquiry. A "but for" requirement, on the other hand, has in
itself no limiting principle; it literally embraces every event that
hindsight can logically identify in the causative chain. True, as the
Ninth Circuit has noted, courts can use the reasonableness prong to keep
Pandora's jar from opening too wide. But to say that the harm that might
be done by one factor can be prevented by another is not, after all,
an affirmative justification for the former.
That being said, we are persuaded that strict adherence to a proximate
cause standard in all circumstances is unnecessarily restrictive. The
concept of proximate cause is critically important in the tort context
because it defines the scope of a defendant's liability. In contrast,
the first prong of the jurisdictional tripartite test is not as rigid:
it is, "relatively speaking, . . . a 'flexible, relaxed standard.'" Sawtelle ,
70 F.3d at 1389 (citation omitted). We see no reason why, in the context
of a relationship between a contractual or business association and a
subsequent tort, the absence of proximate cause per se should always
render the exercise of specific jurisdiction unconstitutional.
When a foreign corporation directly targets residents in an ongoing effort
to further a business relationship, and achieves its purpose, it may
not necessarily be unreasonable to subject that corporation to forum
jurisdiction when the efforts lead to a tortious result. The corporation's
own conduct increases the likelihood that a specific resident will respond
favorably. If the resident is harmed while engaged in activities integral
to the relationship the corporation sought to establish, we think the
nexus between the contacts and the cause of action is sufficiently strong
to survive the due process inquiry at least at the relatedness stage.
This concept represents a small overlay of "but for" on "proximate
cause." In a sense it is a narrower and more specific identification
of the Seventh Circuit's formulation for jurisdiction-worthiness of claims
lying "in the wake" of commercial activities in the forum.
It may be that other kinds of fact patterns will be found to meet the
basic factor of foreseeability, but we have no occasion here to pronounce
more broadly.
This case is illustrative of our reasoning. Through its ongoing correspondence
with Kiddie Products, Tak How knew that Kiddie Products employees would
stay at its hotel, and could easily anticipate that they might use the
pool, a featured amenity of the hotel. The district court thoroughly
described this connection. The Hotel's solicitation of Kiddie's business
and the extensive back-and-forth resulting in Burke's reserving a set
of rooms for Kiddie employees and their spouses set in motion a chain
of reasonably foreseeable events resulting in Mrs. Nowak's death. The
possibility that the solicitation would prove successful and that one
or more of the guests staying at the Hotel as a result would use the
pool was in no sense remote or unpredictable; in fact, the Hotel included
the pool as an attraction in its promotional materials.
899 F. Supp. at 31. While the nexus between Tak How's solicitation of
Kiddie Products' business and Mrs. Nowak's death does not constitute
a proximate cause relationship, it does represent a meaningful link between
Tak How's contact and the harm suffered. Given these circumstances, we
think it would be imprudent to reject jurisdiction at this early stage
of the inquiry.
By this approach, we intend to emphasize the importance of proximate
causation, but to allow a slight loosening of that standard when circumstances
dictate. We think such flexibility is necessary in the jurisdictional
inquiry: relatedness cannot merely be reduced to one tort concept for
all circumstances. Though we are recognizing a narrow exception to the
proximate cause test, we note an additional protection for defendants'
rights: "the relatedness requirement . . . authorizes the court
to take into account the strength (or weakness) of the plaintiff's relatedness
showing in passing upon the fundamental fairness of allowing the suit
to proceed." Ticketmaster , 26 F.3d at 207.
We recognize it will not always be easy to apply this flexible approach
to particular circumstances, but that is a function of the complexity
of this area of the law. The jurisdictional inquiry is often a difficult
fact specific analysis in which "[t]he greys are dominant and even
among them the shades are innumerable." Pleasant Street ,
960 F.2d at 1088 (citing Estin v. Estin , 334 U.S. 541,
545).
B. Purposeful Availment
The next issue is whether Tak How's contacts with Massachusetts constitute
purposeful availment. The purposeful availment requirement ensures that
jurisdiction is not premised on "random, isolated, or fortuitous" contacts
with the forum state, Sawtelle , 70 F.3d at 1391 (quoting Keeton v. Hustler
Magazine, Inc. , 465 U.S. 770, 774), but rather guarantees that the
exercise of jurisdiction is "fair, just, or reasonable." Id. (quoting Rush v. Savchuk ,
444 U.S. 320, 329). Our two focal points are voluntariness and foreseeability. Ticketmaster ,
26 F.3d at 207. The defendant's contacts with the forum state must be
voluntary -- that is, not based on the unilateral actions of another
party or a third person. Burger King , 471 U.S. at 475; Vencedor
Mfg. Co. v. Gougler Indus., Inc. , 557 F.2d 886, 891 (1st
Cir. 1977). In addition, the defendant's contacts with the forum state
must be such that he should reasonably anticipate being haled into court
there. World-Wide Volkswagen Corp. v. Woodson , 444 U.S.
286>, 297; Escude Cruz v. Ortho Pharmaceutical Corp. ,
619 F.2d 902, 905 (1st Cir. 1980).
We think that Tak How's unprompted June 1993 correspondence with Kiddie
Products, which led directly to the ill-fated Hong Kong trip in September
1993, was at least minimally sufficient to satisfy this requirement.
The June 1993 correspondence contained promotional materials from the
Holiday Inn designed to further entice Kiddie Products employees to stay
at the hotel. Even if it may be said that the materials were sent as
part of an on-going relationship between the two companies that was originally
instigated by Kiddie Products, the continued correspondence by Tak How
to Massachusetts does not amount to the kind of unilateral action that
makes the forum-state contacts involuntary. Tak How had an obvious financial
interest in continuing business with Kiddie Products, and the June 1993
correspondence is the best example of an unprompted solicitation designed
to facilitate that business relationship. In order to be subject to Massachusetts'
jurisdiction, a defendant need only have one contact with the forum state,
so long as that contact is meaningful. McGee v. International
Live Ins. Co. , 355 U.S. 220, 223; Burger King , 471 U.S.
at 475> n.18.
Whether prompted or unprompted, Tak How's on-going correspondence and
relationship with Kiddie Products, designed to bring Massachusetts residents
into Hong Kong, rendered foreseeable the possibility of being haled into
a Massachusetts court. That Tak How might have to defend itself in a
Massachusetts court is certainly foreseeable based on its direct correspondence
with Kiddie Products, but its other contacts with Massachusetts reveal
an even more substantial attempt by Tak How to purposefully avail itself
of the privilege of conducting business activities in the state: Tak
How advertised its hotel in national and international publications that
circulated in Massachusetts; it solicited by direct mail some of its
previous guests residing in Massachusetts; and Tak How listed its hotel
in various hotel guides used at travel agencies in Massachusetts. Exercising
jurisdiction is appropriate where the defendant purposefully derives
economic benefits from its forum-state activities. Pritzker ,
42 F.3d at 61-62 (citing Burger King , 471 U.S. at 476).
C. The Gestalt Factors
Our conclusion that minimum contacts exist in this case does not end
the inquiry. Personal jurisdiction may only be exercised if it comports
with traditional notions of "fair play and substantial justice." International
Shoe , 326 U.S. at 320. Out of this requirement, courts have developed
a series of factors that bear on the fairness of subjecting a nonresident
to a foreign tribunal. Burger King , 471 U.S. at 477; Pleasant
Street , 960 F.2d at 1088. These "gestalt factors" are
as follows:
(1) the defendant's burden of appearing, (2) the forum state's interest
in adjudicating the dispute, (3) the plaintiff's interest in obtaining
convenient and effective relief, (4) the judicial system's interest in
obtaining the most effective resolution of the controversy, and (5) the
common interests of all sovereigns in promoting substantive social policies.
Id. (citing Burger King , 471 U.S. at 477). The purpose
of the gestalt factors is to aid the court in achieving substantial justice,
particularly where the minimum contacts question is very close. In such
cases, the gestalt factors may tip the constitutional balance. Ticketmaster ,
26 F.3d at 209. The Supreme Court's decision in Asahi Metal Indus.
Co. v. Superior Court , 480 U.S. 102, is one such example.
In Asahi , the question of minimum contacts divided the Court,
but eight of the Justices agreed that exercising personal jurisdiction
would not comport with notions of fair play and substantial justice.
This Court has thus adopted a sliding scale approach: "[T]he weaker
the plaintiff's showing on the first two prongs (relatedness and purposeful
availment), the less a defendant need show in terms of unreasonableness
to defeat jurisdiction." Ticketmaster , 26 F.3d at 210. The
reverse is equally true: a strong showing of reasonableness may serve
to fortify a more marginal showing of relatedness and purposefulness.
See id. (citing Donatelli v. National Hockey League ,
893 F.2 459, 465 (1st Cir. 1990)); see also Sawtelle ,
70 F.3d at 1396.
1. The Burden of Appearance. It would undoubtedly be burdensome for Tak
How to defend itself in Massachusetts: Tak How's only place of business
is in Hong Kong. This Court has recognized, however, that it is almost
always inconvenient and costly for a party to litigate in a foreign jurisdiction. Pritzker ,
42 F.3d at 64. Thus for this particular gestalt factor to have any significance,
the defendant must demonstrate that "exercise of jurisdiction in
the present circumstances is onerous in a special, unusual, or other
constitutionally significant way." Id. Tak How alleges nothing
special or unusual about its situation beyond the ordinary cost and inconvenience
of defending an action so far from its place of business. Under Pritzker ,
that is not enough: it simply cannot be the case that every Hong Kong
corporation is immune from suit in Massachusetts. But see Ticketmaster ,
26 F.3d at 210 (noting the importance of considering the distance the
defendant must travel in giving weight to this factor in the analysis).
We are also persuaded that the burden on Tak How will be minimized by,
for example, the availability of transcripts from the Coroner's Court
for use in the Massachusetts proceeding.
We have also noted that the burden of appearance is an important gestalt
factor primarily because it allows a court to guard against harassing
litigation. Ticketmaster , 26 F.3d at 211 (citing Gulf Oil
Corp. v. Gilbert , 330 U.S. 501, 508)). Were there any indication
in the record that the Nowaks brought the present suit to harass Tak
How, the burden of appearance in Massachusetts might weigh in Tak How's
favor; however, the record does not so indicate.
2. Interest of the Forum. Although a forum state has a significant interest
in obtaining jurisdiction over a defendant who causes tortious injury
within its borders, Ticketmaster , 26 F.3d at 211, that interest
is diminished where the injury occurred outside the forum state. Sawtelle ,
70 F.3d at 1395. Nonetheless, our task is not to compare the interest
of the two sovereigns -- the place of the injury and forum state -- but
to determine whether the forum state has an interest. Id. While
it is true that the injury in this case occurred in Hong Kong, it is
equally true (unlike Sawtelle ) that significant events took place
in Massachusetts giving it an interest in this litigation. Tak How solicited
business in the state. As the district court noted, Massachusetts has
a strong interest in protecting its citizens from out-of-state solicitations
for goods or services that prove to be unsafe, and it also has an interest
in providing its citizens with a convenient forum in which to assert
their claims. Burger King , 471 U.S. at 473. Given the forum-state
activities that took place prior to Mrs. Nowak's death, we conclude that
Massachusetts has a strong interest in exercising jurisdiction even though
the injury took place in Hong Kong.
3. The Plaintiffs' Convenience. This Court must accord deference to the
Nowaks' choice of a Massachusetts forum. See , e.g. , Foster-Miller ,
46 F.3d at 151. Regardless, it is obvious that a Massachusetts forum
is more convenient for the Nowaks than another forum, particularly a
Hong Kong forum. Further, there exists substantial doubt that the Nowaks
could adequately resolve the dispute in Hong Kong: Hong Kong's laws regarding
contingency fees and posting of security bonds with the court make litigation
economically onerous for plaintiffs, and the future of Hong Kong's political
system is also uncertain.
4. The Administration of Justice. This factor focuses on the judicial
system's interest in obtaining the most effective resolution of the controversy.
Usually this factor is a wash, Ticketmaster , 26 F.3d at 211; Sawtelle ,
70 F.3d at 1395, but in one case we held that preventing piecemeal litigation
might favor one jurisdiction over another. Pritzker , 42 F.3d
at 64. Tak How argues that a Massachusetts action would require the application
of Hong Kong law, the use of interpreters, and the transportation of
key witnesses from Hong Kong that are not subject to compulsory process.
On the other hand, the Nowaks point to possible political instability
in Hong Kong as the British Colony prepares to revert to Chinese sovereignty.
Interpreters and transportation of witnesses would likely also be necessary
in Hong Kong. We conclude that the question of efficient administration
of justice favors a Massachusetts forum. Given the likelihood that the
Nowaks would face great obstacles in Hong Kong due to possible political
instability, as well as Hong Kong laws on contingency fees and security
bonds, efficiency concerns require a Massachusetts forum. See United
Elec. Workers v. 163 Pleasant St. Corp. , 987 F.2d 39, 46-47
(1st Cir. 1993) (finding that fourth gestalt factor weighed against a
foreign jurisdiction where "it is far from clear that there will
be any judicial resolution, let alone the most effective judicial resolution,
of this controversy" if the case could not proceed in Massachusetts).
5. Pertinent Policy Arguments. The final gestalt factor addresses the
interests of the affected governments in substantive social policies.
Massachusetts has an interest in protecting its citizens from out-of-state
providers of goods and services as well as affording its citizens a convenient
forum in which to bring their claims. These interests are best served
by the exercise of jurisdiction in Massachusetts. On the other hand,
Hong Kong has an interest in protecting visitors to promote and preserve
its tourism industry, in protecting its businesses, and in providing
all parties with a convenient forum. Only one of Hong Kong's interests
-- protecting its businesses -- might be compromised by a Massachusetts
forum, while Massachusetts' primary interest -- protecting its citizens
-- might be compromised by a Hong Kong forum. We thus conclude that the
final Gestalt factor tips only slightly in the Nowaks' favor.
On balance, we think the gestalt factors weigh strongly in favor of a
Massachusetts forum. When considered in combination with the Nowaks'
adequate showing on the first two prongs of the constitutional test,
we think that, on the specific facts of this case, the exercise of jurisdiction
in Massachusetts is reasonable and does not offend the notions of fair
play and substantial justice. The district court therefore properly denied
Tak How's Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction.
III.
Tak How next appeals the denial of its motion to dismiss for forum
non conveniens . The doctrine of forum non conveniens permits
a trial court, on a discretionary basis, to dismiss a case where
an alternative forum is a available in another country that is fair
to the parties and substantially more convenient for them or the
courts. Howe v. Goldcorp Invs., Ltd. , 946 F.2d 944,
947 (1st Cir. 1991), cert. denied , 502 U.S. 1095. Application
of the doctrine is committed to the sound discretion of the trial
court, whose decision will not be reversed absent a clear abuse of
discretion. Mercier v. Sheraton Int'l, Inc. , 981
F.2d 1345, 1349 (1st Cir. 1992) ( Mercier III ) (appeal after
remand of Mercier II , infra ; we have previously referred
to the district court's opinion as Mercier I ), cert. denied ,
508 U.S. 912. This Court finds an abuse of discretion only where
the district court (1) failed to consider a material factor, (2)
substantially relied on an immaterial factor, or (3) assessed the
appropriate factors but clearly erred in weighing those factors. Mercier v. Sheraton
Int'l, Inc. , 935 F.2d 419, 423 (1st Cir. 1991) ( Mercier
II ). Since there is a strong presumption in favor of a plaintiff's
forum choice, the defendant must bear the burden of proving both
the availability of an adequate alternative forum and that considerations
of convenience and judicial efficiency strongly favor litigating
the claim in the alternative forum. Id. at 423-424; Mercier
III , 981 F.2d at 1349.
We have emphasized that the doctrine of forum non conveniens is
used to avoid "serious unfairness" and that plaintiff's choice
of a forum will be disturbed only rarely. Howe , 946 F.2d at 950
(citing Piper Aircraft Co. v. Reyno , 454 U.S. 235, 259; Gulf
Oil Corp. v. Gilbert , 330 U.S. 501, 507). The Supreme Court
has provided a list of relevant considerations. "Private interest" factors
include relative ease of access to sources of proof, availability of
compulsory process, comparative trial costs, ability to enforce a judgment, "and
all other practical problems that make trial of a case easy, expeditious
and inexpensive." Gilbert , 330 U.S. at 508. "Public
interest" factors include the practical difficulties of unnecessarily
imposing upon a busy court the obligation to hear a case more fairly
adjudicated elsewhere, the imposition on jurors called to hear a case
that has no relation to their community, and the familiarity of the court
with applicable laws. Id. at 508-509.
One final principle informs our analysis in this case. The Supreme Court
has stated that,
Where there are only two parties to a dispute, there is good reason why
it should be tried in the plaintiff's home forum if that has been his
choice. He should not be deprived of the presumed advantages of his home
jurisdiction except upon a clear showing of facts which either (1) establish
such oppressiveness and vexation to a defendant as to be out of all proportion
to plaintiff's convenience, which may be shown to be slight or nonexistent,
or (2) make trial in the chosen forum inappropriate because of considerations
affecting the court's own administrative or legal problems.
Koster v. Lumbermens Mut. Co. , 330 U.S. 518, 524.
Based on these principles, we are unable to say that the district court
abused its discretion. Tak How's first argument is that the district
court failed to articulate its reasons for denying the motion to dismiss.
It is true that the district judge chose to rule on the motion orally
rather than issue a written opinion; however, it is apparent from the
hearing transcript that the judge considered relevant factors. Before
ruling on the motion, the judge questioned counsel about the plaintiffs'
right to have a jury trial in Hong Kong, and he stated that granting
the motion would be outcome determinative because, as a practical matter
and due to additional burdens under Hong Kong laws, it would be very
difficult for the Nowaks to bring suit there. The hearing transcript
is certainly not as detailed as the written opinion denying the jurisdictional
motion, but the court was entitled to rule on the motion orally.
The question here is whether the district court failed to consider a
material factor or failed to correctly weigh the factors. Given that
Tak How has the burden of proving the elements of forum non conveniens ,
we shall review the factors alleged to justify dismissal that Tak How
has put forth, bearing in mind that Koster , supra , places
a heavy burden on defendants where, as here, plaintiffs brought suit
in their home forum. There is no question that Hong Kong is an available
forum, as Tak How is subject to service of process in Hong Kong. Mercier
II , 935 F.2d at 424. There also appears to be no dispute that Hong
Kong would provide an adequate forum in the sense that its courts recognize
a similar cause of action. Tak How next contends that the private interest
factors of Gilbert , supra , weigh in favor of a Hong Kong
forum: it notes that it would bear the expense of transporting witnesses
to the United States, that it might face difficulty in joining third-party
defendants in a Massachusetts court, and that a Hong Kong court might
not enforce the judgment of a Massachusetts court. These factors do not
constitute the type of "oppressiveness and vexation" required
by Koster disproportionate to the Nowaks' inconvenience of suing
in Hong Kong. The Nowaks would also have to transport witnesses to Hong
Kong and later seek to enforce a foreign judgment in their home state.
In addition, the Nowaks point to private interest factors that weigh
in their favor: they would face financial obstacles because Hong Kong
law prohibits contingent fee agreements and requires that they deposit
an amount equal to Tak How's costs with the court; also, possible political
instability in the region could add further difficulties to litigation
in Hong Kong. Regardless of the difficulties the Nowaks might face in
Hong Kong, it is enough that Tak How failed to demonstrate either oppressiveness
to itself or only a slight or nonexistent interest in convenience on
the Nowaks' part. Koster , 330 U.S. at 524.
Nor is Tak How able to demonstrate public interest factors that make
trial in Massachusetts inappropriate. It points to the fact that Massachusetts
choice-of-law rules require application of Hong Kong law, and that a
Hong Kong court would be "more at home" with such laws. This
concern is not sufficient to overcome the presumption in favor of plaintiffs'
chosen forum. This Court has previously noted that "the task of
deciding foreign law [is] a chore federal courts must often perform." Mercier
III , 981 F.2d at 1357 (quoting Manu Int'l, S.A. v. Avon
Prods., Inc. , 641 F.2d 62, 68 (2d Cir. 1981)). We therefore give
this factor little weight. Id. Tak How points to no other public
interest factor that weighs against a Massachusetts forum.
IV.
For the foregoing reasons, the district court's decision to deny Tak
How's motions to dismiss for lack of personal jurisdiction and on the
grounds of forum non conveniens is AFFIRMED.
FOOTNOTES
* Of the Seventh Circuit, sitting by designation.
-
Section II.A. was authored by Judge Coffin.
This opinion was circulated to the active judges of the First Circuit
before issuance. This informal circulation, however, is without prejudice
to a petition for rehearing or suggestion of en banc reconsideration
on any issue in the case. NLRB v. Hospital San Rafael,
Inc. , 42 F.3d 45, 51 n.1 (1st Cir. 1994).
-
Shute was reversed by the Supreme
Court on alternative grounds. 499 U.S. 585. As reflected by subsequent
cases, the Ninth Circuit still adheres to the "but for" test. See Ballard v. Savage ,
65 F.3d 1495, 1500 (9th Cir. 1995); Terracom v. Valley
Nat'l Bank , 49 F.3d 555, 561 (9th Cir. 1995). But see Omeluk v. Langsten
Slip & Batbyggeri A/S , 52 F.3d 267, 271 (9th Cir. 1995)
(questioning Shute 's authority).